(Adds additional comment from AAL)
LONDON/JAKARTA, Sept 30 (Reuters) - Food giant Nestle
plans to stop sourcing from subsidiaries of Astra Agro
Lestari (AAL), a major Indonesian palm oil producer accused by
environmental groups of land and human rights abuses.
The move comes as multinationals face increased reputational
and legal pressure from consumers and governments to clean up
their global supply chains in the fight against climate change.
Nestle, maker of KitKat chocolate and Nespresso coffee,
told Reuters that following a recent independent assessment, it
instructed its suppliers to ensure palm oil from three
subsidiaries of AAL no longer enters its supply chain.
It did not specify the claims again AAL other than to say it
had been on its 'grievance' list for several months.
The Swiss-based group expects it will not be using any palm
oil from the AAL subsidiaries by the end of the year.
AAL denied the accusations made against it.
"Astra Agro is very serious about implementing our
sustainability policy. It is not true that Astra Agro or its
subsidiaries carry out land grabbing," Mr. Santosa, president
director of AAL, told Reuters.
He added that Nestle was not a direct buyer of products
produced by AAL, but most probably bought from its customers.
"Astra Agro conducts daily physical spot sales, a common
practice in the commodity business, so the direct impact of this
issue is immaterial" he said.
The European Commission has proposed several laws aimed at
preventing and, in the case of forced labour, banning the import
and use of products linked to environmental and human rights
Friends of the Earth said Nestle's move to stop sourcing
from AAL is an important "first step" and renewed its call on
consumer majors such as Procter & Gamble, Hersheys
<HSY.N >, Kelloggs <K.N >, Unilever and PepsiCo
to follow suit.
"Nestle and other consumer giants now have a monumental
opportunity to ensure grievances are redressed, conflicts are
resolved, and justice is delivered to communities," the
environmental group said in a statement.
(Reporting by Maytaal Angel, Additional reporting by Bernadette
Christina; Editing by Kim Coghill)